MANAMA: The board of directors of Arab Banking Corporation (ABC), the Arab international banking group based in Bahrain, is seeking a capital enhancement of $1.11 billion taking the total paid-up capital to $3.1 billion through a rights issue.
The capital increase came on the backdrop of the bank’s successful turnaround which helped the bank realize $80 million profits in the first nine months of 2009.
The board on Wednesday called for an extraordinary general meeting of its shareholders on Jan. 28 to approve an increase in the paid-up capital of the bank from $2 billion to $3.11 billion by way of a priority rights offering to existing shareholders. This will substantially enhance ABC’s shareholders’ equity which stood at $2.1 billion at 30 September 2009.
ABC’s current capital base remains strong with a capital adequacy ratio, based on the Basel II capital adequacy regime, of 16.9 percent at Sept. 30, 2009, predominantly Tier 1 which totaled 13.6 percent after a capital increase in 2008 of $1.0 billion.
Building on the strength of this platform, the board has proposed the new rights issue to cement ABC’s strategic transformation plan. Last year, ABC engaged an internationally reputed consultancy firm to perform a critical review of the strategic objectives of the ABC Group with an objective to enhance shareholder value.
